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Thought Provoking Tale of Economics!

Discussion in 'BlackHat Lounge' started by QuietZorg, Jan 27, 2011.

?

So, should Mr Helo pick up the $100?

  1. Yes

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  2. No

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  1. QuietZorg

    QuietZorg Regular Member

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    Well I thought it was great point that an economics lecturer made to my class recently. Puts things in perspective! You may of read it before, but I didn't so want to share it with you guys.

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    SO, your walking along a street. You see a $100 note on the ground. Do you waste 5 seconds of your life to walk over to it , bend over , and pick it up? I would, and of course you would... I mean come on, are we going to make $100 in 5 seconds that easily? Could we have possibly spent that 5 seconds doing something else that would make us over $100? What is your opportunity cost in picking up the money?

    Carlos Slim Helo. He is the richest man in the world, net worth 18.5 billion in ONE year. So is it worth his time, wasting 5 seconds picking up the $100 note? well lets see. If he works 9-5, total 8 hrs per day with say 30 days holiday. That's ~1.9 million 5 second intervals. How much does he make per 5 second interval? $9.5k . He makes $9.5k in 5 seconds.

    So what should he do? Should he walk over and pick up the $100 note?
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    Yes I know there are many assumptions and what nots with this tale, and also you may be saying "well duh that's no surprise someone earns that much in 5 seconds" but ignore those. I was going to suggest to the lecturer that obviously he should pay someone to pick it up for him...

    Anyway, hopefully some people find this interesting, cool or amusing.

    :rolleyes:
     
  2. MeisMJ²

    MeisMJ² Regular Member

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    I find this very amusing, as I am an Economics student as well, in my first year.
    Well, if he pays someone to do it, he needs at least 2 seconds to tell him to, that's still around 3.4k he lost right there :)

    On a side note, do you happen to use Lipsey & Crystal ?
     
  3. QuietZorg

    QuietZorg Regular Member

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    Yep.. well it's an improvement I guess ;)
    I'm guessing that's a book? I am an Electronic Engineer student, just doing one economics class, not a core subject, so no I don't use that, whatever it is!
     
  4. BENNY8877

    BENNY8877 Supreme Member

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    I think that to him $100 is just like a penny to you and me, so he would just ignore it.
     
  5. ExtraWinner

    ExtraWinner BANNED BANNED

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  6. AutoBlogger

    AutoBlogger Power Member

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    Picking up money from street is not Economic work. Similar to begging(According to economics, begging is not an economic job)
     
  7. Ramsweb

    Ramsweb Senior Member

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    hmmm...not such a great example by the professor. Nice effort but it doesn't make a lot of sense. Really rich people break their backs in the initial stages although they get really rich with smart investing rather than hard work after a certain point.

    In any case, it was a very odd example. It can however be used to explain a concept called unconscious selfishness in humans. There was a documentary I saw on Discover channel where a driver was made to drive a car while sipping a coffee. They then suddenly introduced an obstacle in the course and analyzed the actions of the driver with a high quality ultra slow motion. The first reaction of the driver was to save the cup of coffee although he was driving a car that was much more valuable. It was fascinating to watch because the driven realizes after a few micro seconds that the car is more important and tries to save the car instead. It was great to watch.

    The example used by the professor was along the same lines I guess. Not a good one for an economics class though....
     
  8. jb2008

    jb2008 Senior Member

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    No. Monetary profit = +100, Opportunity cost -9.5k , net loss -$9,400 = He does not pick it up. Not to mention the very slight risk to his safety of picking up money that is not his off the street. It could be some crackfiend's who has just realised she lost it and will do anything to get it back :O